The number of people travelling between China's mainland and the Hong Kong Special Administrative Region (HKSAR) has increased by leaps and bounds since the beginning of the year, producing unexpected economic benefits for both sides.

The HKSAR government's issuing of multiple visas to mainlanders and the removal of Hong Kong's tour quota by mainland authorities early this year pushed the number of mainland visitors to Hong Kong to a record.

More than 3.4 million mainland people crossed the border during the January-July period, an amazing 43 percent surge from a year ago. Short-time visitors accounted for 39 percent of all traffic to Hong Kong, compared with almost 31 per cent a year before.

Mainland visitors, who replaced Americans as the biggest spenders, have helped prop up the depressed Hong Kong retail market, local sources said.

An unidentified spokeswoman from the Hong Kong Tourism Board said the contribution of mainland visitors to the retail sector is extremely desirable.

"This is one area where we can most strongly benefit from the growing numbers of mainland visitors, because mainlanders are by far our biggest spenders on shopping," she said in a written statement.

And many Hong Kong retailers catering to mainland tourists are laughing all the way to the bank.

"You can't imagine it, Time Square is filled with mainland visitors and salespeople have to speak putonghua rather than English or Cantonese to serve customers and make deal," said a person only known as Yuki, a vendor at Veeko, a fashion outlet in Time Square, one of Hong Kong's largest shopping malls.

She said the number of mainland buyers at her shop increased by at least 50 percent in the first half of the year, compared with 2001. "They are now our target buyers," she said.

The economic downturn and rising unemployment have failed to dampen Hongkongers' passion for travel.

And an increasing number of them are choosing to visit the Chinese mainland or neighbouring countries rather than more expensive destinations in Europe and North America.

In particular, Hong Kong travellers have swarmed to bordering Shenzhen for cheaper entertainment and shopping.

Tourists heading to the mainland accounted for 86 per cent of Hong Kong's total outbound traffic.

It is not uncommon for Hongkongers to spend about HK$1,000 (US$128.2) to travel somewhere in South China's Guangdong Province or the Guangxi Zhuang Autonomous Region for two or three days, according to Ronnie Yuen, chairman of the Travel Industry Council of Hong Kong.